I've broken axles a couple of times and it's not been a big deal, though I also didn't have a kludged up rear hub like yours.

I've also had a rear wheel pop completely out -- I was trackstanding in an intersection waiting for a left turn, felt the back end drop out, caught the bike and wheel and ran across the intersection to the sidewalk. This was a mechanical failure that I was able to recover from, though I looked like a dork and I stopped traffic all around me.

To be honest, though, your setup seems pretty scary to me. Even with all the loctite I'd worry about nuts slipping off. But you seem to know what you're doing.

Is there any chance of cold setting the rear triangle?

RFM